/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
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TSX-V: CUG and CUG.DB
MONTREAL, March 23, 2016 /CNW/ - Cyprium Mining Corporation
(TSXV: CUG) ("Cyprium" or the "Company") is
pleased to announce that it intends to complete, on or about
April 1st, 2016, a private
placement which will help fund the continued activities at the
Potosi Mine located in Northern
Mexico.
The private placement will consists of up to 8,000,000 units
(the "Units") at a price of $0.065 per Unit for gross proceeds of up to
$520,000 (the "Offering").
Each Unit will be comprised of one (1) common share in the capital
of the Company ("Common Share") and one (1) share purchase
warrant of the Company ("Warrant"). Each Warrant will be
exercisable into one Common Share at an exercise price of
$0.10, expiring two (2) years from
the date of issuance.
Mr. Alain Lambert, Chairman and
CEO of Cyprium stated: "The rehabilitation of shaft #3 of the
Potosi mine and the exploration at
level 2, 3 and 4 of the mine continue to progress on budget and
according to schedule. The main activities over the last two months
consisted in the overhaul of the rail system for the extraction of
mineralized material, the repair of the hoist and implementation of
various measures for improved safety in the mine. Over the next six
weeks we expect to proceed with the installation of the necessary
drilling and mining equipment infrastructure at level 3 and 4 of
the mine, including the installation of a new air compressor."
The net proceeds made available through the sale of the Units
will be used by the Company to pay for the continued development of
the Company's Potosi mining
project in Mexico, the costs of
the Offering, for working capital and general corporate
purposes.
As part of the Offering a director of the Company (the
"Insiders") has arranged for the sale of 977,000 Common
Shares of his personal holdings at a price of $0.065 per Common Share through the facilities of
the TSX Venture Exchange (the "Swap"). The proceeds from the
Swap will be used by such director to subscribe in the
Offering.
Cyprium may engage finders or agents to act as agents of Cyprium
in connection with the Offering and the Swap, and in connection
therewith may pay finders and agents a cash commission of up to 8%
of the proceeds of the Offering or the Swap that result from such
parties efforts, subject to compliance with applicable securities
laws. The finders and agents may also be granted warrants
("Placement Finder Warrants") to purchase up to 8% of
the number of Units sold under the Offering or the Swap, with each
Finder Warrant entitling the holder to purchase one Unit at
$0.065 per Unit for a period of
eighteen months from the closing of the Offering.
Closing of the Offering and issuance of the Units, the Warrants
and the Placement Finder Warrants is subject to certain conditions
including, but not limited to, the receipt of all necessary
approvals, including the approval of the Exchange. Pursuant to
applicable securities laws, all securities issued pursuant to the
Offering will be subject to a hold period of four months plus one
day following the closing of the Offering.
The Company announces that, concurrently with the closing of the
Private Placement, it will complete a second closing of the Bond
Financing (as defined below) in a minimum amount of US $141,000 (the "Second Tranche
Disbursement"). In connection with the Second Tranche
Disbursement, the Corporation will issue three year bonds (the
"Bonds") in the aggregate amount of US $141,000. The Bonds will bear interest at a rate
of 12.5% per annum, calculated and payable quarterly in arrears
commencing on June 30, 2016. In
March 2015, the Company announced a
bond financing for a total amount of US $4.5
million to be received by the Company in three disbursements
before the end of 2015 (the "Bond Financing"). In
April 2015, the Company completed the
closing of the first disbursement in an amount of US$1.0 million with expected additional
disbursements in 2015 for the remainder of the Bond Financing. As
previously announced, Cyprium has been informed by the fund manager
subscribing to the Bond Financing that, while the subsequent 2015
disbursements have been delayed, the fund remains committed to the
disbursement of the remainder of the Bond Financing. The delay in
the disbursement of the Bond Financing is solely related to the
liquidity situation of the fund subscribing to this financing and
not as a result of any conditions not met by Cyprium. Cyprium also
continues to evaluate other financing alternatives to supplement
the Bond Financing.
A finder's fee of 8% of the gross proceeds of the Second Tranche
Disbursement will be payable in cash by the Corporation to SC
Strategy Consult AG (the "Finder"). The Corporation will
also issue to the Finder share purchase warrants ("Bond Finder
Warrants") to purchase Common Shares with an exercise price of
$0.13 per share for a period of three
years from the date of issuance.
Closing of the Second Tranche Disbursement and issuance of the
Bonds and the Bond Finder Warrants is subject to certain conditions
including, but not limited to, the receipt of all necessary
approvals, including the approval of the Exchange. Pursuant to
applicable securities laws, all securities issued pursuant to the
Second Tranche Disbursement will be subject to a hold period of
four months plus one day following the closing of the Second
Tranche Disbursement.
The Company wishes to update its previously disclosed conversion
of certain secured and unsecured debt into either Common Shares of
the Company or convertible debentures of the Company (the "Debt
Conversion") (please refer to the Company's July 28th, 2015 news release). The
Company announces that it has come to terms to complete the
conversion by arm's length holders of $90,000 of secured debt into convertible
unsecured debentures of the Company (the "Convertible
Debentures"). The Convertible Debentures will mature three (3)
years from the date of issuance, will bear interest at a rate of 8%
per annum payable quarterly in cash. The principal amount of the
Convertible Debentures shall be convertible at any time at the
option of the holder into Common Shares of the Company at a price
of $0.08 per Common Share, and upon
giving effect to such conversion, all accrued and unpaid interest
will be paid in full within 60 days.
Closing of the Debt Conversion and the issuance of the Common
Shares and the Convertible Debentures pursuant to the same is
subject to certain conditions including, but not limited to, the
receipt of all necessary approvals, including the approval of the
Exchange. Pursuant to applicable securities laws, all securities
issued pursuant to the Debt Conversion will be subject to a hold
period of four months plus one day following the closing of the
Debt Conversion.
The Company has also entered into various debt settlement
agreements. The Company has entered into a debt settlement
agreement with eight creditors who are not insiders of the Company
to settle $246,025 by the issuance of
3,785,000 Units of the Company (the "Units for Debt"). Among
those creditors the Company will settle $53,625 in compensation with three of its senior
employees in Mexico by issuing a
total of 825,000 Units. Mr. Carlos
Arzola, a director of Cyprium who resides in Mexico, has requested the Company to pay
outstanding director fees in the amount of $32,500 through the issuance of Common Shares
(the "Arzola Shares"). As a result, the Company plans to
issue 500,000 Common Shares at an issue price of $0.065 per Common Share to Mr. Arzola.
Mr. Arzola commented on the conversion: "I believe the
conversion of compensation by our senior employees in Mexico demonstrate their confidence in the
Company and the development of the Potosi mine. I was more than happy to take the
initiative and take the lead in converting my directors' fees in
shares of Cyprium."
The Company's Chairman and C.E.O., Mr. Alain Lambert, requested that the Company pay
outstanding fees in the amount of $48,000 through the issuance of Common Shares. As
a result, the Company plans to issue 738,461 Common Shares (the
"Lambert Shares") at an issue price of $0.065 per Common Share. Finally, a company
wholly owned and controlled by Alain
Lambert, the Chairman and CEO of Cyprium, is a holder of
US$21,000 of unsecured debt of the
Company. In connection with the abovementioned Debt Conversion,
that company has agreed to convert the said US$21,000 of the debt into Convertible
Debentures.
The issuance of the Units for Debt and the Lambert Shares and
Arzola Shares are subject to certain conditions including, but not
limited to, the receipt of all necessary approvals, including the
approval of the Exchange. Pursuant to applicable securities laws,
all securities issued pursuant to the Units for Debt and the
Lambert Shares and Arzola Shares will be subject to a hold period
of four months plus one day following their issuance.
About Cyprium Mining Corporation
For the description of Cyprium Mining's business and the
Company's Forward Looking Statement Disclaimer which form an
integral part of this news release please visit our website at:
http://www.cypriummining.com/en/investors/disclaimers
Neither TSX Venture Exchange Inc. nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange Inc.) accepts responsibility for the adequacy or
accuracy of this release.
This news release contains "forward-looking information" (within
the meaning of applicable Canadian securities laws) and "forward
-looking statements" (within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995). Such statements or
information are identified with words such as "anticipate",
"believe", "expect", "plan", "intend", "potential", "estimate",
"propose", "project", "outlook", "foresee" or similar words
suggesting future outcomes or statements regarding an outlook. Such
statements include, among others, those concerning the Company's
anticipated plans for developments of the Company and its mining
projects.
Such forward-looking information or statements are based on a
number of risks, uncertainties and assumptions which may cause
actual results or other expectations to differ materially from
those anticipated and which may prove to be incorrect. Assumptions
have been made regarding, among other things, management's
expectations regarding future growth, plans for and completion of
projects by Company's third party relationships, availability of
capital, and the necessity to incur capital and other expenditures.
Actual results could differ materially due to a number of factors,
including, without limitation, operational risks in the completion
of Company's anticipated projects, delays or changes in plans with
respect to the development of Company's anticipated projects by
Company's third party relationships, risks affecting the ability to
develop projects, risks inherent in operating in foreign
jurisdictions, the ability to attract key personnel, and the
inability to raise additional capital. No assurances can be given
that the efforts by the Company will be successful. Additional
assumptions and risks are set out in detail in the Company's
MD&A, available on SEDAR at www.sedar.com.
Although the Company believes that the expectations reflected in
the forward-looking information or statements are reasonable,
prospective investors in the Company's securities should not place
undue reliance on forward-looking statements because the Company
can provide no assurance that such expectations will prove to be
correct. Forward-looking information and statements contained in
this news release are as of the date of this news release and the
Company assumes no obligation to update or revise this
forward-looking information and statements except as required by
law. Investors should note that, while the mineralized material
being processed by the Company is assayed, there is no certainty
that the proposed operations will be economically or technically
viable. Investors should also note that the Potosi silver mine and La Chinche property
have no established mineral resources or mineral reserves as
defined by NI 43-101. Although Cyprium Mining has made a production
decision regarding the Potosi
silver mine based on historical production records, historical
results of sampling and drilling, a feasibility study of its
projects has not been completed and there is no certainty that the
proposed operations will be economically or technically viable.
SOURCE Cyprium Mining Corp